Equivalent units of production would best be defined as:
A) The number of whole units that could have been completed with direct material, direct labor, and overhead used during the period.
B) Completed units that are produced through the same process.
C) Number of units transferred out during the period, regardless of when the units were started into production.
D) Units of production that are the same kind of product.

Question

Quizplus · Accepted Answer

Equivalent units of production refer to the number of complete units that could have been produced with the combination of direct material, direct labor, and overhead used during a given period. It takes into account the stage of completion of partially completed units and converts them into an equivalent number of whole units. Option A best defines this concept. Option B and D are incorrect as equivalent units of production are not necessarily completed units or units of the same product. Option C refers to the number of units transferred out, which is not the same as equivalent units of production.

Equivalent Units of Production Would Best Be Defined As